Transparency when it comes to how tips are managed across the Irish service sector has long been absent. The law that came into force last week, which lays down how the money consumers choose to pass on to those who serve them is handled, is therefore welcome.
There are, however, questions as to how the law will be policed and if it will sufficiently empower a typically younger and more transient cohort of the workforce to stand up to long-standing practices imposed by employers which have been, at best, questionable.
The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 means hotels, restaurants and other places of business where tipping is commonplace must clearly display a policy on how tips are distributed, with an expectation that such polices will be applied fairly.
Fairness and enforcement will be key to the effectiveness of the new legislation. For too long, the tipping business has been a free-for-all, with employers given free rein to dictate sometimes absurd rules behind the scenes,while creating the impression that their tips were going directly to those working on the front line.
Few tipping diners would have expected gratuities were being used by management to cover electricity bills, or breakages, or to bring the earnings of staff up to minimum wage but that has often been the case.
While the new law will allow businesses to determine their own policies, multiple factors must be taken into account, including the role of the person, their seniority, the volume of sales generated and the hours worked. Such a broad brushstroke approach is understandable given the diverse nature of the services sector, but it means disagreements as to who gets what are inevitable.
Employees who feel they are being wronged will have the right to make a complaint to the Workplace Relations Commission, a big enough step. They will continue to need the support of unions and – more importantly – the public to ask the right questions at the right times to ensure the spirit of the law is followed as much as the letter.